A profit-volume graph differs from a cost-volume-profits graph in that a profit-volume graph displays only
A) costs associated with units produced
B) operating income associated with expected sales
C) revenues and costs associated with sales volume
D) revenues expected at targeted sales levels
E) all of these
B
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Which of the following statements is CORRECT?
A. One of the disadvantages of a sole proprietorship is that the proprietor is exposed to unlimited liability. B. It is generally easier to transfer one's ownership interest in a partnership than in a corporation. C. One of the advantages of the corporate form of organization is that it avoids double taxation. D. One of the advantages of a corporation from a social standpoint is that every stockholder has equal voting rights, i.e., "one person, one vote." E. Corporations of all types are subject to the corporate income tax.
Morrel University has a small shuttle bus that is in poor mechanical condition. The bus can be either overhauled now or replaced with a new shuttle bus. The following data have been gathered concerning these two alternatives (Ignore income taxes.): Present BusNew BusPurchase cost new$32,000 $40,000 Remaining net book value$21,000 - Major repair needed now$9,000 - Annual cash operating costs$12,000 $8,000 Salvage value now$10,000 - Trade-in value in seven years$2,000 $5,000 Refer to Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided.The University could continue to use the present bus for the next seven years. Whether the present bus is used or a new bus is purchased, the bus would be traded in for another bus at
the end of seven years. The University uses a discount rate of 12% and the total cost approach to net present value analysis.If the new bus is purchased, the present value of the annual cash operating costs associated with this alternative is closest to: A. $(54,800) B. $(36,500) C. $(42,800) D. $(16,200)
What would be the amount of the acquisition differential amortized during 2018?
LEO Inc. acquired a 60% interest in MARS Inc. on January 1, 2018 for $400,000. Unless otherwise stated, LEO uses the cost method to account for its investment MARS Inc. On the acquisition date, MARS had common stock and retained earnings valued at $100,000 and $150,000 respectively. The acquisition differential was allocated as follows: $80,000 to undervalued inventory. $40,000 to undervalued equipment. (to be amortized over 20 years) The following took place during 2018: ? MARS reported a net income and declared dividends of $25,000 and $5,000 respectively. ? LEO's December 31, 2018 inventory contained an intercompany profit of $10,000. ? LEO's net income was $75,000. The following took place during 2019: ? MARS reported a net income and declared dividends of $36,000 and $6,000 respectively. ? MARS' December 31, 2019 inventory contained an intercompany profit of $5,000. ? LEO's net income was $48,000. Both companies are subject to a 25% tax rate. All intercompany sales as well as sales to outsiders are priced to provide the selling company with gross margin of 20%. A) $120,000. B) $80,000. C) $82,000. D) $78,000.
Assume that the average firm in your company's industry is expected to grow at a constant rate of 5 percent, and its dividend yield is 4 percent. Your company is about as risky as the average firm in the industry, but it has just developed a line of innovative new products which leads you to expect that its earnings and dividends will grow at a rate of 40 percent [ = D0(1 + g) = D0(1.40)] this
year and 25 percent the following year, after which growth should match the 5 percent industry average rate. The last dividend paid (D0) was $2 . What is the value per share of your firm's stock? a. $42.60 b. $82.84 c. $91.88 d. $101.15 e. $110.37